It often makes financial sense to file a joint tax return. In the wake of a divorce, however, that joint tax filing can come back to haunt you.
Once both partners have signed and submitted a tax return, they become jointly as well as individually liable for the tax, along with any interest or penalty due. This personal and joint liability remains in place even if your divorce papers stipulate that a former spouse will take responsibility for outstanding payments on previously filed joint returns.
Fortunately, there are ways to break free from the burden of an ex-spouse’s tax debts. There are three forms of tax relief you may be eligible for: equitable relief, innocent spouse relief, and separation of liability. Recent changes in tax law have made it easier for taxpayers to qualify for these different types of tax relief. In addition, if you fail to meet the requirements for one approach, you may still pass the test for the other options.
If you’re being held accountable for the tax responsibilities of a former spouse, it’s best to work with tax specialists who are well versed in the IRS requirements for meeting these tax relief methods. Taxation Solutions, Inc. consults with numerous clients throughout the Raleigh area to help them secure innocent spouse relief and other potential avenues of tax debt reduction.
It’s time to improve your financial outlook going forward with advice on how to file and substantiate innocent spouse claims. Contact Taxation Solutions Inc. today to get the process started!